Start-Up Competences and Early Stage Hiring: A Contingency Perspective

Abstract

Early employment growth can be a stepping-stone for start-up scaling. Yet, we have little insights into the factors that can enable early stage hiring. Building on competence-based theory, we posit that initial competences, namely those assembled via founders’ start-up experience and external shareholders, can help start-ups overcome early staffing challenges. However, through a contingency perspective, we demonstrate that a start-up’s ability to leverage those initial competences and hire soon after entry is contingent on its strategic orientation towards innovation. Both internal and external competences are likely to be underutilized in less R&D intensive start-ups lacking innovation-based growth aspirations. We find general support for our hypotheses with a rich dataset of Italian innovative start-ups, and additionally show that early staff recruitment is largely characterized by (positive) assortative matching dynamics in the human capital attributes of the demand and supply sides.